An estimated 20% of new businesses fail within the first year. Many of these failures arise from poor money management.
As a small business owner, it’s your responsibility to make sure that you can keep up with the financial stressors that come alongside running your business. If you’ve never done more than manage your own budget, though, how do you start?
We’re here with a few money-management tips for small business owners to get you started. Read on to learn more.
1. Always Start With a Budget
Before you even open the doors of your business, it’s crucial that you have a budget. It should be part of the initial planning process.
It’s common for business owners to get over-excited when they start planning for their new small business. They’re so passionate about the end result that they try to bypass the initial steps.
Your budget has to include everything from startup costs to marketing. You have to be able to balance your spending with your revenue, and at first, that can be difficult.
How much are you going to spend to create your products or services? Are you paying for marketing? How much is your website domain? What about your employees?
Without a budget, you’re dooming yourself for failure.
2. Don’t Spend More Than You Can Afford
After you have a budget, make sure that you stick to it. You have to live within your means.
Again, business owners often get too enthusiastic about their businesses. They can’t see the forest for the trees. They overspend on trivial or unnecessary things and can’t make up the difference with their current revenue.
This causes business owners to underpay their employees, lose employees, and eventually shut down.
3. Automate Bill Payments
As a new small business owner, you have a lot of responsibilities. It’s likely that you’ll forget things from time to time. You can not forget your bills if you want to keep your business up and running.
One of the best financial tips for small business owners is to automate your bills as soon as you know what they’re going to cost you. It’s a good idea to also track those payments to make sure that there aren’t any mistakes (and to compare prices later on), but automating them will save you the trouble of late payments.
You don’t want to end up losing electricity or internet in the middle of a busy workday.
4. Use an Accountant
Our best piece of accounting advice for small business owners is simply to use an outside accountant. Again, you already have a lot on your plate. Unless you have previous experience in accounting, using CPA services is an obvious choice.
Accountants are great at offering financial advice for small business owners, tracking (and revising) budgets, and even helping you prepare for tax season.
A personal accountant gives you a safety net. At least when you’re first starting out, take advantage of their services.
Use These Money Tips For Small Business Owners
Small business owners can use all of the advice that they can get when it comes to money management. Use these financial tips to get you started off on the right foot. You’ll set yourself up for business success.
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